the seven deadly diseases

1. Four Days w/ Dr. Deming The Seven Deadly Diseases Things that block the transformation and ultimately the Things that will kill off the company

2. Four Days w/ Dr. Deming

3. Four Days w/ Dr. Deming Deadly Disease 1 continued Two basic problems for managers: Problems of Today caused by yesterday�s failed solutions Problems of Tomorrow caused by failing to deal with some of today�s problems

4. Four Days w/ Dr. Deming 2 ~ Emphasis on Short-term Profits Wall Street�s pressure to succeed causes: creative accounting golden parachutes currency swapping downsizing or flattening mergers tax schemes and junk bonds

5. Four Days w/ Dr. Deming Deadly Disease 2 continued Accept recessions as a part of variation plan for the inevitable recovery avoid paying dividends when business is bad economic downturns are good times to invest in the corporate future instead

6. Four Days w/ Dr. Deming 3 ~ Evaluation of Performance The Theory of Evaluation in using performance appraisals, merit ratings or annual reviews is good. Supervisors critique employees Employees use feedback to improve their performance

7. Four Days w/ Dr. Deming Deadly Disease 3 continued Evaluation Equation

8. Four Days w/ Dr. Deming Deadly Disease 3 continued

9. Four Days w/ Dr. Deming Alternatives to Evaluation Leadership Long conferences with employees Educate and train workers Use performance figures only to find out who is outside the system (special cause of variation) and transfer them to other jobs

10. Four Days w/ Dr. Deming 4 ~ Mobility of Management The White Knight Syndrome find a company that is in trouble enter as a savior make lots of changes churn things up (tampering) show results (short-term gains) get rewards leave before long-term problems appear

11. Four Days w/ Dr. Deming Turnover vs. Stability In-house Hires requires training promotes morale encourages retention of good employees enhances stability invest in employees External Hires requires orienting lowers morale imports new ideas may lose good employees reduces stability invest in stockholders

12. Four Days w/ Dr. Deming 5 ~ Running Company on Figures Alone The most important figures are unknown and unknowable multiplying effect of a happy customer divisive effect of a disgruntled customer amount of profit gain attributable to improved quality greater cooperation the net worth of morale

13. Four Days w/ Dr. Deming Deadly Disease 5 continued Figures are important but they are also historical Take Time: learn to do the seemingly impossible Take time: understand and trace variations in data Stop doing �Ready - Fire - Aim�

14. Four Days w/ Dr. Deming Deadly disease 5 ~ Wrap-Up Why is there never time to do something right the first time but there is always time to do it over? Escape form the �Bottom Line Mentality� and study processes not results. If the processes are sound, results will take care of themselves.

15. Four Days w/ Dr. Deming 6 ~ Excessive Medical Costs To reduce operating or retail costs, try lowering medical expenses health reform is crucial DRGs are not necessarily successful reduced coverage isn�t the solution!

16. Four Days w/ Dr. Deming 7 ~ Excessive Legal Costs We live in a litigious society To break a contract, just hire a lawyer The most successful contracts consist of handshakes and commitments - nothing in writing! Trust between suppliers and customers is all that is needed; pride is on the line.

17. Four Days w/ Dr. Deming Obstacles to Getting the Job Done Quality is an outcome ~~ it is not a method!

18. Four Days w/ Dr. Deming 1 ~ Hope for Instant Pudding Experts are frequently hired to �install� or �fix� quality in an organization Top management doesn�t understand Person accepting job doesn�t understand either

19. Four Days w/ Dr. Deming Obstacle 1 continued Short-term fixes to improve Profit & Loss fail in the long run From Queueing Theory: As labor reaches 100% efficiency, the backlog becomes infinitely large Service levels will decline and the company will go out of business Don�t export American management practices to friendly nations

20. Four Days w/ Dr. Deming 2 ~ Assumption that �Quick Fixes� Exist Suppositions are still prevalent that automation, gadgets, new machinery will transform an industry. Sometimes transformations will occur (the Internet for example) but the industry transformation was not under corporate control Standards that permit +/-% variation in compliance add to overall variance.

21. Four Days w/ Dr. Deming 3 ~ The Search for Examples Examples without theory teach nothing Success depends on understanding the Theory of Profound Knowledge, the 14 obligations, the diseases and obstacles. You cannot replicate success by adopting the methods of others more successful than yourself. WHY NOT?

22. Four Days w/ Dr. Deming Plant Tours Teach Nothing Copying business practices from diffe-rent systems will lead to unpredictable results Quite often, those who are successful are clueless about why that is so; nor do they know how to become better. Yet, they freely share their ignorance with those who are unsuccessful!

23. Four Days w/ Dr. Deming Be Cautious about Adopting We are advised to �copy the best busi-ness practices� But to know why another company is successful requires knowledge of their suppliers, customers, practices, systems, psychology, etc.

24. Four Days w/ Dr. Deming The Problem with Benchmarking Benchmarking is a fancy name for copying. To find the �best in class� and emulate it without understanding why it is best will lead to disaster Quality Control Circles evolved from an application of a theory - they are right for Japan but not for us

25. Four Days w/ Dr. Deming 4 ~ Obsolescence in Schools Schools teach a �Profession of Management� without teaching how to gain the necessary experience Imperative for managers to understand a business from the ground up in order to understand their own capabilities and limitations Poor teaching of Statistical Methods

26. Four Days w/ Dr. Deming 5 ~ Tables of Acceptance are Lethal They guarantee someone will get a bad part

27. Four Days w/ Dr. Deming Management vs. Tampering Confusion between special and common causes of variation leads to tampering. Special causes require management�s corrective action. Shewhart Charts help form an operational definition for Quality Control -- it is a standard

28. Four Days w/ Dr. Deming Dr. Shewhart�s Experiment Q: At what point do the number of mistakes of common for special and special for common balance? A: When the UCL and LCL are set to � 3?